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Glad we took profits on ReneSola (SOL) when we did

Posted August 19, 2008

ReneSola Ltd. (NYSE:SOL) drops despite excellent earnings.

by J. Christoph Amberger

Baltimore — (TFN): Forbes summarize this morning’s earnings call as follows: “ReneSola Ltd. Tuesday said second-quarter net income rose to $23.3 million, or 38 cents per American depositary share, from $5.9 million, or 12 cents per American depositary share, in the year-ago period. The mean estimate of analysts polled by Thomson Reuters was for second-quarter profit of 32 cents a share.

“Revenue for the China-based manufacturer of solar wafers more than tripled to $173 million from $44.5 million a year earlier. Analysts, on average had estimated revenue of $141.3 million. ReneSola said it experienced ’strong’ market demand for its wafer products.”

Tripling of earnings per share. Beating analyst estimates. Expected strong growth. In a normal market, this would pass for excellent news. Investors wouldn’t think twice about putting their hard-earned shekels into a company like that.

But not in this crazy market. I am not quite sure what it takes for a strong company to see its share price appreciate these days. But value sure has nothing to do with it. Accordingly, SOL sold off today, losing over 2.5% over yesterday’s close.

Luckily, we had locked in profits at $18 yesterday, allowing our checkers-like stop loss strategy to cinch a 17.3% gain in five days. We’d like to have seen more, but then again, who wouldn’t. Right now, we’re standing back. If the stock retreats below $17, we’re in the market again for the medium term.

Krista Das on TFN Market InsightsWhat do we see ahead for solar stocks in general? May I divert your attention to the video interview our own Krista Das recently conducted with green energy guru Nick Hodge? Just click here to view it!

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Posted by J. Christoph Amberger · Filed Under Oil and Energy 

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